ex102.htm


    AMENDMENT
NO. 2

    


    


    This
AMENDMENT NO. 2, dated as of August 19, 2008 (the “Amendment”), is
entered into by and among New Earth LNG, LLC, a Delaware limited liability
company (the “Borrower”), the other
persons designated as “Loan Parties” on the signature pages hereto (the “Loan Parties”), and
Fourth Third LLC, a Delaware corporation, as agent for the Lenders (the “Agent”) and as a
Lender.

     

    WHEREAS,
Borrower, the other Loan Parties, Lenders (as defined therein) and Agent are
party to a certain Amended and Restated Credit Agreement, dated as of June 26,
2008 (as heretofore amended, restated, supplemented or otherwise modified, the
“Credit
Agreement”; all capitalized terms defined in the Credit Agreement and not
otherwise defined herein shall have the meanings assigned thereto in the Credit
Agreement); and

     

    WHEREAS,
Borrower, the other Loan Parties, Agent and Lenders have agreed to amend the
Credit Agreement to recognize the addition of an interest reserve account
thereto and as otherwise provided herein;

     

    NOW,
THEREFORE, in consideration of the premises and the agreements, provisions and
covenants herein contained, Borrower, the other Loan Parties, Lenders and Agent
agree as follows:

     

    SECTION
1.

    DEFINED TERMS AND
SECTIONS

    


    Capitalized
terms set forth herein shall have the meanings when used herein as set forth in
the Credit Agreement.  Section references used herein shall, unless
otherwise expressly provided, be deemed to be references to Sections of the
Credit Agreement.

    


    SECTION
2.

    AMENDMENTS

    


    Subject
to the satisfaction of the conditions to effectiveness referred to in Section 3 below,
Borrower, the other Loan Parties, Lenders and Agent agree that the Credit
Agreement is hereby amended as follows:

     

    2.1           Interest Reserve
Account.  To add a new Section 2.4.5
thereto, to read as follows:

     

     

    2.4.5           Interest Reserve
Account.  As soon as practicable after the Closing Date, but in
any event not later than August 20, 2008, Borrower shall have deposited with
Agent cash in the amount of One Million Dollars ($1,000,000) (the “Initial Interest Reserve
Amount”) to be held by Agent in a segregated “money market” deposit
account at Deutsche Bank (or another bank at Agent’s election) under Agent’s
sole control and exclusive right to make withdrawals (the “Interest Reserve
Account”).  From and after that date on which the Interest
Reserve Account is established and funded with the Initial Interest Reserve
Amount, Agent shall withdraw from the Interest Reserve Account on each date that
accrued interest on the Loans becomes due and payable, funds sufficient in
amount to make such interest payment if Borrower has notified Agent by not later
than five (5) Business Days prior thereto that Borrower is requesting a
withdrawal therefrom to make such interest payment when due; otherwise, Borrower
shall continue to be obligated to remit payments of accrued interest as and when
due by wire transfer on the due date of immediately available funds sufficient
in amount to make such payment.  If, however, at any time Agent is
prevented from making such withdrawal from the Interest Reserve Account or if
available funds on deposit in the Interest Reserve Account are not sufficient to
make, or make in full, such interest payment, then, Borrower nonetheless shall
continue to be required to make the applicable payment of interest, or so much
thereof as then continues to be owing,  as otherwise required to be
paid hereunder on the due date for such interest payment in the manner described
hereinabove.  If any Event of Default shall occur and be continuing,
Agent shall have the right, at its option, (i) to require that Borrower re-fund
the Interest Reserve Account with cash at least sufficient (when aggregated with
available funds then on deposit therein) to make at least twelve (12) months of
accrued interest payment (or such lesser number of months as Agent may request)
and/or (ii) to liquidate the Interest Reserve Account and apply all available
funds then on deposit therein to all Obligations then due and
payable.  All charges incurred by Agent in maintaining the Interest
Reserve Account shall be charged thereto.  Any interest earned on
funds deposited in the Interest Reserve Account shall be retained on deposit
therein and be added to the funds available to Agent for withdrawal
therefrom.  Upon full payment and satisfaction of the Obligations,
Agent shall close the Interest Reserve Account and return all available funds
then on deposit therein to Borrower or at its direction to any other
Person.  Agent may also, at Borrower’s request, credit the amount of
all available funds then on deposit in the Interest Reserve Account against
outstanding obligations in connection with any voluntary prepayment of the
Obligations by Borrower.  The Interest Reserve Account and all funds
on deposit therein shall constitute part of the Collateral and, by its deposit
of the Initial Interest Reserve Amount Borrower shall be deemed to have granted
to Agent a security interest therein and all interest earned thereon and in the
Interest Reserve Account, with Agent having the rights and remedies of a secured
party in regard thereto, as described more particularly in the Guarantee and
Collateral Agreement.  Notwithstanding the foregoing, at such time as
Borrower has received from Parent not less than Fifteen Million Dollars
($15,000,000) in new cash equity contributions, so long as no Event of Default
has occurred which is then continuing, Borrower may request that Agent close the
Interest Reserve Account and return all funds then on deposit therein to
Borrower, which Agent agrees to do promptly after its receipt of such
request.

     

    2.2           Cross-Default.  To
amend the sum “$1,000,000” appearing in Section 8.1.2(a) of the Credit Agreement
to “$500,000.”

     

    2.3           Litigation
Schedule.  To amend Schedule 5.6 of the Credit Agreement to
include those matters set forth on Schedule 3(t) to that Securities Purchase
Agreement, dated as of August 19, 2008, between Parent and Castlerigg PNG
Investments LLC,  and each other party listed as a “Buyer” on the
Schedule of Buyers.

     

    2.4        Black Forest Debt. To consent to
the prepayment of the principal amount of the Black Forest Debt on or before
August 20, 2008, by an amount equal to $580,000, more or less (but not by more
than $590,000 in any event) provided that the entire cash amount needed to make
such prepayment comes directly from Parent, and not from the Borrower,
notwithstanding any term of the Credit Agreement or the Black Forest
Subordination Agreement to the contrary otherwise prohibiting such
prepayment.

    


    SECTION
3.

    CONDITIONS TO
EFFECTIVENESS

     

    The
amendment(s) set forth hereinabove shall become effective retroactive to the
Closing Date (the “Effective Date”)
provided that
the following conditions are satisfied in full:

     

    (a) Agent
shall have received one or more counterparts of this Amendment executed and
delivered by Borrower, the other Loan Parties, Agent and Lenders;

     

    (b) Agent
shall have received one or more counterparts of the Consent and Reaffirmation in
the form of Exhibit
A hereto, executed and delivered by each of the Guarantors named
therein;

     

    (c) no
Default or Event of Default is continuing or would result after giving effect to
this Amendment; and

     

    (d) all
representations and warranties of the Loan Parties contained in this Amendment
and in the Credit Agreement shall be true and correct in all material respects
as of the date hereof and as of the Effective Date, except to the extent such
representations and warranties relate to a specific date.

     

    SECTION
4.

    NO WAIVER ; LIMITATION
ON SCOPE ; CONSENT

     

    (a) Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants and conditions of the Loan Documents shall remain in full force and
effect in accordance with their respective terms.  The amendments set
forth herein shall be limited precisely as provided for herein and shall not be
deemed to be waivers of, amendments of, consents to or modifications of any term
or provision of the Loan Documents or any other document or instrument referred
to therein or of any transaction or further or future action on the part of
Borrower or any other Loan Party requiring the consent of Agent or Lenders
except to the extent specifically provided for herein.

     

    (b) Agent and
Lenders hereby consent to the execution, delivery and performance by Parent of
that certain Securities Purchase Agreement, dated as of August 19, 2008, with
Castlerigg Master Investments Ltd. and each other party listed as a “Buyer” on
the Schedule of Buyers, together with the related $3,188,235 Subordinated
Convertible Note, Warrant to Purchase Stock and any other documents contemplated
to be delivered thereby, and the consummation by Parent of each of the
transactions contemplated thereby, and agree that the same will not be deemed to
be in violation of any provision of the Credit Agreement, as amended, or any
other Loan Documents; provided, however, that the
foregoing is not intended as a consent to, and shall not permit, (i) Parent from
granting any Liens to any Buyer to secure its obligations arising under the
foregoing transactions, or (ii) Borrower or any other Loan Party from issuing
any guaranty in support of such obligations of Parent or granting any Lien to
secure the payment thereof, or (iii) Borrower or any other Loan Party paying any
dividend or making any other cash distribution to Parent for the purpose of
paying any such obligations, or paying any such obligations on behalf of
Parent.

     

    SECTION
5.

    MISCELLANEOUS

     

    (a) Borrower
and the other Loan Parties hereby represent and warrant that this Amendment has
been duly authorized and executed by Borrower and each of the other Loan Parties
and that the Credit Agreement, as amended by this Amendment, is the legal, valid
and binding obligation of Borrower and the other Loan Parties party thereto,
enforceable in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
law or in equity).

     

    (b) Each of
Borrower and the other Loan Parties repeats and restates the representations and
warranties of such Person contained in the Credit Agreement as of the date of
this Amendment  and as of the Effective Date, except to the extent
such representations and warranties relate to a specific date; provided that
references to the Credit Agreement or “this Agreement” in such representations
and warranties shall be deemed to be references to the Credit Agreement as
amended pursuant to this Amendment.

     

    (c) Borrower
agrees to pay on demand all of Agent’s costs and expenses arising in connection
with the execution and delivery of this Amendment.

     

    (d) Borrower
and the other Loan Parties hereby ratify and confirm the Credit Agreement as
amended hereby, and agree that, as amended hereby, the Credit Agreement remains
in full force and effect.

     

    (e) Borrower
and the other Loan Parties agree that the Loan Documents to which each such
Person is a party remain in full force and effect (as amended hereby in the case
of the Credit Agreement) notwithstanding the execution and delivery of this
Amendment and that nothing contained in this Amendment shall constitute a
defense to the enforcement of any Loan Document.

     

    (f) This
Amendment may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all of
which counterparts together shall constitute but one and the same
instrument.

     

    (g) All
references in the Loan Documents to the “Credit Agreement” and in the Credit
Agreement as amended hereby to “this Agreement,” “hereof,” “herein” or
the like shall mean and refer to the Credit Agreement as amended by this
Amendment (as well as by all subsequent amendments, restatements, modifications
and supplements thereto).

     

    (h) THIS
AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).

     

    (i) This
Amendment is a “Loan Document” and each of the provisions set forth in Section 10 (Miscellaneous) of the
Credit Agreement applies to this Amendment and such Note to the same extent such
provision applies to any other Loan Document. Without limitation of the
foregoing, each of the following provisions of the Credit Agreement is hereby
incorporated herein by this reference with the same effect as though set forth
in its entirety herein, mutatis mutandis, and as if
“this Agreement” in any such provision read “this Amendment”: Section 10.2
(Notices), Section
10.10 (Captions), Section 10.13
(Severability), Section 10.14
(Entire Agreement), Section 10.15
(Successors and Assigns), Section 10.17
(Forum Selection; Consent to Jurisdiction) and Section 10.18
(Waiver of Jury Trial).

     

    [SIGNATURE
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    WITNESS the due execution
hereof by the respective duly authorized officers of the undersigned as of the
date first written above.

     

    BORROWER:

     

    
      	
              NEW
      EARTH LNG, LLC

               

               

              By:      /s/
      Kevin
      Markey                                                                 

              Name: Kevin
      Markey                                                                          

              Title:   President                                                                        

            


    

    LOAN
PARTIES:

     

    
      	
              PNG
      VENTURES, INC.

               

               

              By:       
      /s/
      Kevin
      Markey                                                                       

              Name: 
      Kevin
      Markey                                                                          

              Title:     President                                                                      

            
	
               

              APPLIED
      LNG TECHNOLOGIES USA, L.L.C.

               

              By:  New
      Earth LNG, LLC, its sole member

               

                    
                By:       
      /s/
      Kevin
      Markey                                                                       

                Name: 
      Kevin
      Markey                                                                          

                Title:     President                                                                       

              

            
	
               

              FLEET
      STAR, INC.

               

               

                    
                By:       
      /s/
      Kevin
      Markey                                                                       

                Name: 
      Kevin
      Markey                                                                          

                Title:     President
      and Chief Executive Officer                                                               

              

            
	
               

              EARTH
      LEASING, INC.

               

               

                    
                By:       
      /s/
      Kevin
      Markey                                                                       

                Name: 
      Kevin
      Markey                                                                          

                Title:     President                                                                    

              

            
	
               

              ARIZONA
      LNG, L.L.C.

               

              By:  New
      Earth LNG, LLC, its sole member

               

                    
                By:       
      /s/
      Kevin
      Markey                                                                       

                Name: 
      Kevin
      Markey                                                                          

                Title:     President                                                                          

              

            
	
               

              AGENT
      AND LENDERS:

               

              FOURTH
      THIRD LLC,

              as
      Agent and a Lender

               

               

              By:      /s/
      Seth B.
      Taube                                                                     

              Name: Seth
      B.
      Taube                                                                          

              Title:                                                                           

            


    


     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

     

    EXHIBIT
A

    CONSENT AND
REAFFIRMATION

    


    Each of the undersigned (“Guarantors”) hereby
(i) acknowledges receipt of a copy of the foregoing Amendment No. 1; (ii)
consents to Borrower’s execution and delivery thereof and approves and consents
to the transactions contemplated thereby; (iii) agrees to be bound thereby; and
(iv) affirms that nothing contained therein shall modify or diminish in any
respect whatsoever its obligations under the Guarantee and Collateral Agreement
and the other Loan Documents to which it is a party and reaffirms that such
Guarantee and Collateral Agreement is and shall continue to remain in full force
and effect.  This acknowledgement by Guarantors is made and delivered
to induce Agent and Lenders to enter into Amendment No. 2, and Guarantors
acknowledge that Agent and Lenders would not enter into Amendment No. 2 in the
absence of the acknowledgements contained herein.  Although Guarantors
have been informed of the matters set forth herein and have acknowledged and
agreed to same, Guarantors understand that Agent and Lenders have no obligation
to inform Guarantors of such matters in the future or to seek Guarantors’
acknowledgment or agreement to future amendments or waivers, and nothing herein
shall create such a duty.  Capitalized terms used herein without
definition shall have the meanings given to such terms in the Amendment No. 2 to
which this Consent is attached or in the Credit Agreement referred to therein,
as applicable.

    


    IN WITNESS WHEREOF, the undersigned
have executed this Consent and Reaffirmation on and as of the date of Amendment
No. 2.

    


    
      	
              PNG
      VENTURES, INC.

               

               

                    
                By:       
      /s/
      Kevin
      Markey                                                                       

                Name: 
      Kevin
      Markey                                                                          

                Title:     President                                                                      

              

            
	
               

              APPLIED
      LNG TECHNOLOGIES USA, L.L.C.

               

              By:
      New Earth LNG, LLC, its sole member

               

                      
      
                By:       
      /s/
      Kevin
      Markey                                                                       

                Name: 
      Kevin
      Markey                                                                          

                Title:     President                                                          

              

            
	
               

              FLEET
      STAR, INC.

               

                  
      
                By:       
      /s/
      Kevin
      Markey                                                                       

                Name: 
      Kevin
      Markey                                                                          

                Title:     President                                                                      

              

            
	
               

              EARTH
      LEASING, INC.

               

               

                    
                By:       
      /s/
      Kevin
      Markey                                                                       

                Name: 
      Kevin
      Markey                                                                          

                Title:     President                                                                         

              

            
	
               

              ARIZONA
      LNG, L.L.C.

              By:
      New Earth LNG, LLC, its sole member

               

                   
      
                By:       
      /s/
      Kevin
      Markey                                                                       

                Name: 
      Kevin
      Markey                                                                          

                Title:     President